The Rise of Bangladesh's Textile Trade

The Rise of Bangladesh's Textile Trade

Abstract

From the last two decades the economy of Bangladesh has get great advantage from the export oriented push in textile industry. Now it becomes the world’s second garment exporter after China. The country enjoys duty free import into EU under the most privileged EU trade scheme EBA. Due to the lower labour cost Bangladesh becomes lower cost of producer in world and even in time of recession big importers increased their purchases from Bangladesh at very cheap rates. It has a strong network of supporting industries that also cause in reduction of cost like import and transportation costs. Bangladesh faces lots of criticism due to its poor working conditions and women in industry are facing many issues like sexual harassment from male workers or bosses. Bangladesh success is beyond the low wages. It is expected that textile industry will grow and shift the productivity of textile goods away from China as wages of Bengalis rises.

Bangladesh Textile Industry  

In the economy of Bangladesh textile industry is playing a vital role for so long. In the country textile industry is the most important contributor to the economy. According to Textile and Jute minister of Bangladesh, country’s’ industry encompasses textile processes to final outputs. Major exports of Bangladesh are polyester, viscose, man-made filament fabrics and man-made spun yarns. Garments that are exported include sportswear, knitted and woven shirts, blouses, sweaters, jackets shorts, and skirts besides others.

Textile industry of Bangladesh could be divided into three broad categories (i) handloom sector (ii) public sector and (iii) private sector. The last mentioned sector is the fastest growing sector in Bangladesh while employment is provided to large segment of Bangladesh’s population ‘by handloom sector. Garment and textile manufacturers of Bangladesh have to face tough competition from other countries like China, India, Thailand and Pakistan.

In 2014 Bangladesh population was more than 160 million people and it has the highest population density in world. In 2013 around 3.5 to 4 million workers are employed in garment industry. Garments contribute 12% in the GDP of country in 2010.  80% o garments were exported and it values 20 billion USD in 2013. After China Bangladesh is the 2nd largest garment exporter in world. Bangladesh requires 3 billion yard of fabric in a year for the garment production. Almost 80% exports of Bangladesh are garments and textiles creating huge dependency on export revenues and making this industry number one export earner. Woven and knitwear garments are exported to the European Union (EU) mostly that takes in almost 60% of total RMG exports of Bangladesh. European Union (EU) is followed by United States that accounts for above 32% of total (100). Annual turnover of Bangladesh’s garment exports is 20 billion USD in 2013. In 2013 annual value of garment export rose by 11%. Bangladesh needs around 3 billion yards of fabric a year for producing garments. 85 to 90 % percent of the needed fabric is imported from China and other countries. Top product that is imported by Bangladesh is raw cotton. Bangladesh has its own production of cotton that is increasing steadily. In the year 2013 it has produced 120 bales but it has imported 4 million bales, so it can be viewed demand for cotton is much higher than what country produced. It imports cotton from Australia, India, Pakistan, US, Uzbekistan and other countries.